Muhammad Yunus, Grameen Bank and the Zeal to make a difference

          And so began another session that we all were eagerly waiting for. But this session was a bit different from the other sessions. Reason being, that it revolved around a personality, who went off the beaten track and changed the rules of Banking- Muhammad Yunus. A day before the session, we were asked to watch a video about Mr. Yunus and his Grameen Bank. Though I had watched it before, I was more than happy to watch it again. The video infuses us with an enthusiasm to do something for the society, to make a difference. But before telling you more about what happened in the session, let me tell you a little something about the Man himself and his brain-child.

          Muhammad Yunus is a Bangladeshi banker, economist and Nobel Peace Prize recipient. As a professor of economics, he developed the concepts of micro-credit and micro-finance. These loans are given to entrepreneurs too poor to qualify for traditional bank loans. In December 1976, Yunus secured a loan from the government 'Janata Bank' to lend to the poor in a village named Jobra, near Chittagong, Bangladesh. The institution continued to operate, securing loans from other banks to be given to the impoverished without requiring any collateral. The name Grameen is derived from the word gram which means "rural" or "village". By 1982, it had 28,000 members. On 1 October 1983, the pilot project began operation as a full-fledged bank for poor Bangladeshis and was renamed Grameen Bank ("Village Bank").

          Micro-credit loans are based on the concept that the poor have skills that are under-utilized, and with incentive, they can earn more money. A group-based credit approach is applied to use peer-pressure within a group to ensure the borrowers follow through and conduct their financial affairs with discipline, ensuring repayment and allowing the borrowers to develop good credit standing. The bank also accepts deposits, provides other services, and runs several development-oriented businesses including fabric, telephone and energy companies. The bank's credit policy to support under-served populations has led to the overwhelming majority (98%) of its borrowers being women. In 2006 Yunus and Grameen Bank received the Nobel Peace Prize "for their efforts through micro-credit to create economic and social development from below". Yunus has received several other national and international honors  He was awarded the U.S.Congressional Gold Medal in 2010, and presented with it at a ceremony at the U.S. Capitol on 17 April 2013.

Following is the link of the video that we were told to watch and come to the session:

https://www.youtube.com/watch?feature=player_embedded&v=O_6nHYSgHxs

Following are the things that differentiate Grameen Bank from the traditional banks:

1. Mainly located in villages/rural areas.
2. Solidarity Lending where small groups borrow collectively and group members encourage one another to repay. It is an important building block of micro-finance.
3. Women make up the majority of customers and account for around 98% of Grameen Bank customers.
4. Loan given in small amounts.
5. No collateral needed for loans.
6. Goal is to reduce poverty without an eye on maximizing profit.
7. The Poor, not the rich, own the Bank.

          It's difficult to think about the people, the society and the world at large, when businesses are struggling to hold onto their own, when maximizing profits is all that people think. But then, there are people like Mr. Yunus who make sure that the disadvantaged in the society are not left behind, that the society as a whole progresses and not just a tiny fraction of it. This is the culture that has made Grameen Bank what it is today.